Brexit remains the biggest threat to construction, says Galliford Try boss

The managing director of one of the UK’s biggest construction firms has told Scottish politicians that Brexit remains one of the biggest threats to the industry moving forward.

Giving evidence to the economy, jobs and fair work committee, Galliford Try investments chief Mark Baxter told MSPs that while a number of threats continued to threaten the progress of the industry, labour migration and the amount of people being able to be called upon is likely to suffer.

Speaking to Holyrood’s economy committee on 28 March 2018, Baxter said: “There’s a number of threats looming for our industry going forward, Brexit being the biggest one. One thing we can probably be sure of is there will be labour migration away from our industry. I think that’s a big threat for Scotland in that what will happen is the contractors will use the resource they’ve got and pull in, so the extremities will suffer. So I’m seeing a number of threats here and I think there’s a job on for Scotland to market itself as a place to do business.”

His comments sparked Scottish Labour to reiterate the need for the UK to remain a permanent member of the European single market to ensure the free movement of people.

Former Scottish Labour leader and the party’s co-chair for the single market, Kezia Dugdale, said: “This is yet more evidence provided to MSPs of the economic disaster that Brexit will be. We simply can’t put Scotland’s economy at risk like this. The only way to prevent the loss of migrant labour for vital sectors like the construction industry is for the UK to remain a permanent member of the European Single Market, ensuring the free movement of people. With just over one year to go before we’re due to leave the EU, all those who want our economy to grow must fight to retain Single Market membership.”

Baxter was speaking to MSPs just the day after the Aberdeen bypass partner looks to raise more than £157m to help cover costs for the project that had involved collapsed Carillion. Galliford Try and Balfour Beatty are continuing to cover the costs for Carillion going into liquidation in January.

The Aberdeen Western Peripheral Route which was due to be finished by the spring, at a cost of £745m, may now not open until late autumn, according to economy secretary Keith Brown. The firm claim it aimed to raise £157.6m through a rights issue.

Baxter also painted a bleak picture to the committee on the state of play within industry and referenced major projects north of the border which he described as a “unmitigated disaster”.

“The industry is not in a very good place,” the Galliford Try boss added. “UK-wide, the construction and infrastructure industry did about £80bn of turnover last year and lost, collectively, about £1bn. That’s not sustainable. The last three large Scottish infrastructure contracts (the M8, the Aberdeen bypass and the Forth Crossing) have been an unmitigated disaster for the contractors involved and we need to move forward from that.”